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I don't think the answer to this question plays out the way you want it to... 1. Countries that have natural resources can raise capital when they need to, eit

I don't think the answer to this question plays out the way you want it to... 1. Countries that have natural resources can raise capital when they need to, either by selling/taxing rights to those resources or by selling nationalized resources. Ecuador for example uses the dollar and also produces about a half of a million barrels of oil per day. 2. For many developing countries, the whole point of using the dollar is that it precludes monetary over-engineering or corrupt practices that give rise to inflation. This makes the economy safer for the have-nots, who have fixed local-denominated savings and/or earn a fixed local-denominated wage. 3. Simply using the dollar makes it easier to facilitate trade, tourism, and remittances. Panama does a lot of shipping and transit. Ecuador is a tourist destination. Remittances are the major source of foreign income to El Salvador. Those countries that accept dollars and also maintain a dollar-pegged local currency are able to conduct monetary policy while also establishing a measure of confidence in the stability of their currency.

IG_Semmelweiss 6y ago
I think this is only half the story. What you are missing in your detail is that ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way. So this would validate parent comment and actually negate your assertion that parent was incorrect. That being said, this is half the story. And its the other part that matters. This is the first time ecuador gets in trouble post USD adoption. Where it goes from here will directly prove or disprove the very thesis, that parent comment assumed was a foregone conclusion. Thus , your refutation may be correct after all, except for what i believe are different reasons.
- totalZero 6y ago
  > ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way. Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense. > This is the first time ecuador gets in trouble post USD adoption. Uh...what? You're just making stuff up. Ecuador defaulted on two bond issues in 2008. Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.
  - IG_Semmelweiss 6y ago
    A currency bind as in, they have no reserves to pay for their expenses / debt. This specific sort of problem no country that can print their own currency has but that doesnt mean that such recourse does not cause problem on its own. But thats not my point. I dont argue for printed currency. We are actually in agreement there. I'm responding to parent halukakin who said "Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. " I contend that ecuador could prove that statement wrong. The 2008 crisis caught everyone off guard. Once Ecuador comes out of this crisis, we will really see if this experience will be enough to institute good governance reforms which were elusive during the constant ups downs of local currency inflation.

IG_Semmelweiss 6y ago

I think this is only half the story. What you are missing in your detail is that ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way. So this would validate parent comment and actually negate your assertion that parent was incorrect. That being said, this is half the story. And its the other part that matters. This is the first time ecuador gets in trouble post USD adoption. Where it goes from here will directly prove or disprove the very thesis, that parent comment assumed was a foregone conclusion. Thus , your refutation may be correct after all, except for what i believe are different reasons.

totalZero 6y ago
> ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way. Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense. > This is the first time ecuador gets in trouble post USD adoption. Uh...what? You're just making stuff up. Ecuador defaulted on two bond issues in 2008. Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.
- IG_Semmelweiss 6y ago
  A currency bind as in, they have no reserves to pay for their expenses / debt. This specific sort of problem no country that can print their own currency has but that doesnt mean that such recourse does not cause problem on its own. But thats not my point. I dont argue for printed currency. We are actually in agreement there. I'm responding to parent halukakin who said "Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. " I contend that ecuador could prove that statement wrong. The 2008 crisis caught everyone off guard. Once Ecuador comes out of this crisis, we will really see if this experience will be enough to institute good governance reforms which were elusive during the constant ups downs of local currency inflation.